Comprehensive Economic Partnership Agreement (CEPA) between India and Oman
India and Oman have signed a Comprehensive Economic Partnership Agreement (CEPA) that marks a significant milestone in their bilateral relations. This agreement, signed in Muscat, extends zero-duty access to 98.08% of tariff lines from India, covering 99.38% of shipments.
Key Features of the Agreement
- Trade Liberalization:
- India has offered liberalization on 77.79% of its tariff lines, covering 94.81% of imports from Oman by value.
- All zero-duty concessions will apply once the deal takes effect.
- Exports worth $3.64 billion facing a 5% import duty in Oman will move to 0% duty.
- Benefits:
- The agreement is expected to benefit major labor-intensive sectors such as gems and jewellery, textiles, leather, and pharmaceuticals.
- India exported goods worth $4.1 billion to Oman in FY25, with a trade deficit of $2.5 billion.
- Trade in Services:
- Oman has committed to broad market access in 127 sub-sectors, including legal, accounting, and medical services.
- Expanded entry and stay rights for intra-corporate transferees and independent professionals.
Strategic Importance
- Geopolitical and Economic Impact:
- The agreement enhances India's presence at the Gulf's entrance and strengthens supply chains.
- Oman is India's 28th largest export partner and a key gateway to the Gulf and Africa.
Challenges and Negotiations
- Sensitive Products:
- Items like agricultural products, gold, and silver bullion are excluded from concessions to safeguard India's interests.
- Negotiation Timeline:
- Formal negotiations began in November 2023, with the agreement signed on December 18, 2025.
- Delays were caused by demands for revised offers and market access by Oman.
Conclusion
The CEPA between India and Oman represents a strategic consolidation rather than a mere trade breakthrough, offering significant opportunities for trade and economic collaboration in the region.
